UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D. C.
                            SCHEDULE 14A INFORMATION
                    Proxy Statement Pursuant to Section 14(a)
                     of the Securities Exchange Act of 1934
                                (Amendment No. )

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                        Financial Industries Corporation
                (Name of Registrant as Specified In Its Charter)

                _________________________________________________

    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


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The Registrant issued the following press release today:


                     (BW) (Financial Industries Corporation)
          (FNIN) Financial Industries Corporation Reacts to ISS Report

AUSTIN,  Texas  -  (BUSINESS  WIRE)  -  July  18,  2003 -  Financial  Industries
Corporation  (FIC)  today  expressed  its  disappointment  at  the  decision  of
Institutional  Shareholder  Services (ISS) to hinge its proxy  recommendation on
the Board's approval of a legal settlement with former CEO, Roy F. Mitte. ISS is
an advisory panel for large institutional investors.

The company strongly  disagrees with ISS when it states "Whether Mr. Mitte would
have  damaged  the  company  and  whether  it would  have  been  more  costly to
shareholders  if he  continued  the  litigation  and/or  proxy  fight is not the
critical issue."

"The best interest of our  shareholders  is exactly the critical  issue when you
are  operating  a  business  in the real  world,"  said  Eugene E.  Payne,  CEO,
President  and Chairman of FIC.  "Ivory tower  idealism was not the prism though
which the decision to settle this litigation was made."

In its analysis ISS  acknowledged  that FIC  concluded to settle the  litigation
with Mitte by paying a small  fraction  of the amount  that Mitte  sought in the
litigation.  FIC  maintains  that by  entering  into the Mitte  settlement,  the
company  avoided a  possible  ruinous  financial  judgment;  the  incurrence  of
substantial  legal fees;  and the ongoing  disruption to the business  caused by
Mitte's lawsuit.

The ISS report  recognizes that "the company did not directly purchase the Mitte
proxy..."  when it settled  the case,  saying  simply  that the pay-out to Mitte
"gives  the  appearance"  that the  Mitte  Foundation  proxy  is not  completely
independent of the settlement. ISS included in its report management's assertion
that the  proxy was the  subject  of  discussions  that took  place  long  after
discussions regarding settlement of Mitte's monetary claims had commenced.

Payne was pleased to point out that there were a number of positive notes in the
ISS evaluation.  According to ISS, FIC has  outperformed  its peer group and the
Nasdaq  Stock  Market  with  regard  to  corporate  governance.   The  company's
performance  is ranked in the top 16% of all companies  evaluated by the Russell
3000 Corporate Governance Quotient.

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Also,  regarding the strategic direction taken by FIC, the ISS report determined
that FIC's Board had exercised its fiduciary duty in evaluating a potential sale
of the company, and the interest of The Pillar Group.

According  to ISS,  it did not find any  compelling  evidence  to  suggest  that
management's six point business plan,  overall, is not the best course of action
for the company and for shareholders."  The report states "...it is difficult to
dispute  the  company's  potential  for growth  resulting  from  these  [recent]
acquisitions as it would transform the company from offering a limited number of
life  insurance and fixed annuity  products to an  organization  offering a wide
range of  products."  ISS also  recognized  that "the  company  has put in place
policies and procedures specifically designed to prevent deceptive practices and
to protect itself in its relationships" with any new marketing partners.

Payne  mentioned  that FIC would be offering  one  important  correction  to ISS
regarding  information  contained  in its  report.  The FIC  slate of  directors
collectively  owns  0.57% of  stock in the  company.  One of the  nominees,  Ken
Shifrin,  is the Chairman and CEO of American  Physicians  Service Group,  which
owns 3.37% of FIC's  outstanding  stock.  These holdings are comparable to Otter
Creek's reported ownership in the company.

FIC, through its various subsidiaries, owns real estate, an actuarial consulting
firm,  and  markets  and  underwrites  individual  life  insurance  and  annuity
products. For more information on FIC, go to http://www.ficgroup.com

This release may be considered proxy  solicitation  material.  Information about
the  participants in such  solicitation may be found in a filing on Schedule 14A
made with the Securities and Exchange  Commission  (SEC) on June 26, 2003, or by
contacting  the  Company  at  512/404-5000.  Shareholders  are urged to read the
Company's proxy statement  carefully because it contains important  information.
The proxy  statement and other relevant  documents are available for free at the
SEC's website at www.sec.gov, or by contacting the Company at 512/404-5000.

This release may contain "forward-looking  statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995. These statements
are  based on  management's  current  expectations  and are  subject  to  risks,
uncertainty  and  changes  in  circumstances,  which may cause  actual  results,
performance or  achievements  to differ  materially  from  anticipated  results,
performance or achievements.  Investors are reminded that these  forward-looking
statements  must be considered in conjunction  with the cautionary  warnings and
risk-factors  which are detailed in the  Company's  most recent Annual Report on
Form 10-K ,  Quarterly  Report on Form  10-Q,  and its  other  filings  with the
Securities and Exchange Commission. FIC is under no obligation to (and expressly
disclaims any such obligation to) update or alter its forward-looking statements
whether as a result of new information, future events or otherwise.


Contact:    Bob   Bender,    Corporate    Relations    Officer,    512-404-5080,
bbender@ficgroup.com

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